South African mine strikes ease with deal at Amplats

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Published October 27, 2012

| Reuters

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JOHANNESBURG – Striking workers have reached a deal with platinum giant Anglo American Platinum (Amplats) to reinstate 12,000 miners sacked for an illegal strike, which could end the last major industrial action rocking South Africa's mining sector.

Months of often violent wildcat strikes have cut production in the platinum and gold sectors, raising concerns about slowing economic growth as well as awkward questions about President Jacob Zuma's management of the most damaging labor strife since the end of apartheid in 1994.

"They agreed to reinstate all the dismissed workers on the provision that they return to work by Tuesday," Lesiba Seshoka, spokesman for the powerful National Union of Mineworkers, told Reuters on Saturday.

Seshoka said he expected workers would return to their posts and "that will mean the end of the strike".

Amplats said in a separate statement it had reached the deal with the unions and offered sweeteners such as a one-off hardship payment of 2,000 rand ($230) to facilitate the return. The strike has lasted about six weeks and crippled production.

"Employees who do not return to work on Tuesday ... will remain dismissed and/or be subjected to the illegal strike disciplinary action and will not be eligible for any of the benefits mentioned above," it said in a statement.

Over the past days, separate wildcat strikes over wages and working conditions in the gold sector have come to an end with employers sacking, or threatening to sack, miners striking illegally.

South African labor law has clear processes for strikes and walk-outs. Those that do not go through all the proper bureaucratic hoops are considered illegal, and can result in striking workers being sacked.

Mining firms usually reinstate dismissed workers because it is more expensive to train a new workforce. But some of the job losses could be permanent with employers using the labor strife to shut down marginal mines in South Africa.

ANC ELECTION

The deal at Amplats comes as Cynthia Carroll, the chief executive of parent Anglo American , announced her resignation on Friday, after coming under pressure from investors over the firm's lagging share price and continued dependence on strike-hit South Africa.

Anglo owns 77 percent of Anglo American Platinum. Although responsible for 24 percent of its parent's 2011 revenue, Amplats brought in just 8 percent of total operating profit because of soaring costs.

If the workers do return to Amplats, Zuma will have likely weathered a labor storm that threatened to cause problems for him as he seeks re-election as leader of the ruling African National Congress at a party meeting in December.

If Zuma wins the race to lead the party that dominates South African politics, he will be on a path to remain as the country's president for another term that will last until 2019.

Zuma has called on wildcat strikers to return to work, pledged to speed up a massive infrastructure program to improve living conditions in the mining belt and held a high-level meeting with labor and industry trying to break the impasse.

Critics saw these moves as mostly symbolic, doing little to ease the tension and saying hardball negotiation tactics from employers and weeks of lost wages had more of an effect in ending many of the strikes.

Local media said Zuma appeared to have an edge in the ANC race where about 4,500 delegates from local branches will select the party's leaders. Zuma's foes, who see him as an ineffectual leader, could be emboldened if labor tensions flare again.

Many of the strikers have blamed ANC leaders and its labor allies for worrying too much about their political ties and not showing enough concern for miners working deep underground.

The strikes have highlighted persisting glaring income inequality in South Africa, which has increased since Nelson Mandela's ANC took over following the end of white-minority rule in 1994, promising "a better life for all".

Zuma has come in for particular criticism for not responding faster to the August 16 police killing of 34 strikers at Lonmin's Marikana platinum mine, the bloodiest security incident since the end of white-minority rule in 1994.